Russia’s leading tanker group Sovcomflot is the target of another round of Western sanctions
The Treasury’s Office of Foreign Asset Control (OFAC) has designated 14 crude oil tanker vessels as property in which Sovcomflot has an interest, hoping to add greater costs to the company shipping its crude oil and associated products. The sanctions will freeze any US assets of listed entities and bars Americans from dealing with them.
Coming on the eve of the two-year mark of Russia’s invasion of Ukraine, the sanctions target hundreds of entities and individuals in Russia and other countries. Washington is looking to clip Russia’s revenues from oil sales that can further support the war in Ukraine, the Treasury Department said on Friday.
Some of the ships on the list have already faced issues delivering oil to buyers in India. Back in December, Riviera Maritime Media reported that Krymsk, a Gabon-flagged tanker on the new list, had been stationary off the port of Paradip in the Bay of Bengal for weeks.
Two other sanctioned tankers, Georgy Maslov and Anatoly Kolodkin are scheduled to call at Gujarat’s Sikka port. AIS data shows Georgy Maslov is due to arrive this week. Anatoly Kolodkin delivered crude at Vadinar Port and is scheduled to call at Sikka in April.
The blacklist includes 12 other ships consisting of a drillship, a trio of general cargo ships and research vessels from the fleet of state-owned Rosgeologia, a company that provides geological exploration services.
The company that controls Russia’s Zvezda Shipbuilding Complex was also sanctioned. The Treasury Department claims this is for the yard’s role in Russia’s military-industrial manufacturing base.
US sanctions have also targeted Novatek’s mammoth 19.8-mta Arctic LNG project.
Novatek and Sovcomflot’s joint venture Smart LNG, originally set up to own newbuildings for the Arctic LNG 2 project that were to be built at Zvezda, is now on the sanctions list along with civil engineering firm Novatek Murmansk.
In 2023, a round of sanctions targeted Novatek’s flagship project, and in November the US Assistant Secretary for Energy Resources Geoffrey Pyatt told the US Senate Foreign Relations Committee, “Our objective is to kill that project. And we are doing that through our sanctions working with our partners in the G7 and beyond.”
Production from Arctic LNG 2 began in December 2023, even though Novatek had to send force majeure notices to some customers. Major western buyers, among them Shell, Vitol and Gunvor, have sale and purchase agreements with Novatek.
Russia has managed to complete the first production line and says it expects the first cargoes to ship in the next few weeks. Chinese firm Harbin Guanghan Gas Turbine stepped in after US firm Baker Hughes, which had originally been slated to provide turbines, withdrew from the project.
The Kremlin has claimed the project remains on track, despite the sanctions. Responding to the latest round of sanctions, spokesman Dmitry Peskov told reporters, “Nothing fundamentally new has been announced, and it is unlikely that anything fundamentally new can be thought up by those who impose these sanctions without harming their own economy.”
The UK has followed suit and announced its own package of sanctions, some targeting Arctic LNG 2 and its director, Oleg Vyacheslavovich Karpushin.
"This is one of the key links in Putin’s plan to make Russia a major LNG player," the UK government said.
Additionally, six directors of PJSC Novatek, which is the majority owner of Arctic LNG 2 "and a vital asset to Russia’s future as an energy superpower," were sanctioned. The directors include: Lev Vladimirovich Feodosyev, Valery Anatolyevich Kryukov, Viktor Gennadiyevich Nesterenko, Alexei Vitalyevich Orel, Irina Vernerovna Gaida and Alexander Yegorovich Natalenko.
Oil-related sanctions from the UK have targeted oil trader Niels Troost and his company Paramount Energy & Commodities, "which facilitate[s] unfettered trade in Russian oil beyond the reach of the Oil Price Cap," according to the UK government.
Shipping companies Fractal Marine DMCC, Beks Ship Management, and Active Shipping, have also been sanctioned for "business in the Russian energy sector as part of Putin’s shadow fleet".
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